Contract Law - Doctrine of Consideration
The doctrine of consideration has been a source of much discussion over the years. In 1937, the doctrine of consideration was under review by the English Law Revision Committee. They suggested that "the inconvenience and possible injustice resulting from the doctrine of consideration raise the question whether it presents countervailing disadvantages which justify its retention." Furthermore they acknowledged that the French Civil Code finds 'cause' as the important component in a contract. In Germany, the law looks at the 'intention' of the parties that make up the contract. Both societies do not recognise the doctrine of consideration, yet they are both highly developed legal systems, and they operate without the difficulties that our society experiences with the doctrine of consideration. They also acknowledged that, even though there was much support for the abolition of this doctrine, it was "so deeply embedded in...law that any measure which proposed to do away with it altogether would almost certainly arouse suspicion and hostility." The English Law Revision Committee therefore suggested amending the doctrine to eliminate those aspects which may cause both hardship and unnecessary inconvenience. The committee bel
In this case Trident General Insurance Co Ltd (Trident) had issued a public liability policy in favour of the owner of a building site (Blue Circle). In this case Roffey Bros, who had been contracted to refurbish a block of flats, subcontracted the carpentry work to Williams. When Roffey Bros failed to pay Williams the amount owing, Williams sued Roffey Bros. The recommendations made by the committee were not enacted by the Parliament of the United Kingdom. The court held in this case that Musumeci a small fruit and vegetable business, had provided Winadell (the shopping centre from which Musumeci leased premises) a practical benefit by continuing the lease. THE ACTION OF THE COURTSOne principle of consideration is that a promise to perform an existing duty is no consideration. This practical benefit was sufficient consideration to make their agreement for rent reduction binding. CONCLUSIONThe decisions in the previously discussed cases of Williams v Roffey Bros, Trident General Insurance Co Ltd v McNiece Bros, and Waltons Stores v Maher, have resulted in a more flexible and useful doctrine of consideration. Walton's solicitors had responded that Waltons had verbally agreed, but that they were waiting to receive formal instructions. The matter was heard before court which ruled in favour of Myrick. The courts decided that performance of an existing duty did not result in lack of consideration in this case, hence setting precedent that performance of an existing duty alone, is not sufficient to result in no consideration. The court found on both first instance and on appeal in favour of Maher on the basis of common law estoppel. It is my view that when the courts experience cases, such as those previously discussed, whereby a strict application of the doctrine of consideration may cause any hardship or unnecessary inconvenience, the courts will be flexible in its application. " They also stated however that they are not going to abandon the doctrine of privity, and the extent of this judgement would only be limited to the insurance industry.
Common topics in this essay:
Revision Committee,
Roffey Bros,
Pty Ltd,
Fredrick Pollock,
Blue Circle,
Stores Maher,
Supreme Court,
Myrick Stylk,
Waltons Stores,
Civil Code,
roffey bros,
doctrine consideration,
unnecessary inconvenience,
· consideration,
williams roffey,
existing duty,
hardship unnecessary inconvenience,
hardship unnecessary,
insurance co ltd,
consideration ·,
pty ltd,
law revision committee,
insurance co,
williams roffey bros,
english law revision,
|
Acceptance Essays
